E*TRADE Financial Corporation Announces Reduction of Corporate Debt and Public Offering of New Senior Notes
March 02 2015 - 6:30AM
Business Wire
Company also increases revolving credit
facility by $50 million to $250 million
E*TRADE Financial Corporation (NASDAQ:ETFC) today announced
plans to reduce its corporate debt outstanding by $340 million,
while simultaneously effecting a refinance of existing notes.
Specifically, the proposed transaction involves usage of $432
million of corporate cash, along with $460 million from the
issuance of new notes, to redeem existing debt and pay the
associated redemption premiums, accrued and unpaid interest, and
related fees and expenses. In addition, the Company has increased
its revolving credit facility by $50 million to $250 million, which
remains undrawn, enhancing its liquidity position.
Subject to market and other considerations, E*TRADE plans to
offer $460 million in aggregate principal amount of Senior Notes
due 2023 in a public offering. Actual terms of the notes, including
the interest rate, principal amount, and redemption provisions,
will depend on market conditions at the time of pricing.
E*TRADE will use the net proceeds from this offering, along with
$432 million of existing corporate cash, to redeem all of the
outstanding $800 million aggregate principal amount of its 6.375%
Senior Notes due 2019 (“2019 Notes”) pursuant to the make-whole
call, and to pay the associated redemption premiums, accrued and
unpaid interest, and related fees and expenses. This press release
does not constitute a notice of redemption with respect to the 2019
Notes.
E*TRADE also announced that it has increased the amount of its
three-year senior secured revolving credit facility from $200
million to $250 million. The credit facility is secured by first
priority pledges of the equity interests of certain of E*TRADE’s
domestic subsidiaries and pledges of certain intercompany
indebtedness.
Morgan Stanley, J.P. Morgan, and Goldman, Sachs & Co. are
serving as joint book-running managers for the offering. Credit
Suisse and Wells Fargo Securities are serving as co-managers.
E*TRADE has filed an effective registration statement (including
a preliminary prospectus supplement and accompanying base
prospectus) with the Securities and Exchange Commission (SEC) for
the offering to which this communication relates. Before you
invest, you should read the effective registration statement
(including the preliminary prospectus supplement and accompanying
base prospectus) for more complete information about E*TRADE and
this offering. You may obtain these documents for free by visiting
EDGAR on the SEC website at www.sec.gov. Alternatively, copies may
be obtained from Morgan Stanley & Co. LLC, at 180 Varick
Street, 2nd Floor, New York, NY 10014, Attention: Prospectus
Department, by telephone at (866) 718-1649 or by emailing
prospectus@morganstanley.com.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any of the notes or any other
securities, nor will there be any sale of the notes or any other
securities in any state or jurisdiction in which such an offer,
solicitation or sale is not permitted.
About E*TRADE Financial
E*TRADE Financial and its subsidiaries provide financial
services including online brokerage and related banking products
and services to retail investors. Specific business segments
include Trading and Investing and Balance Sheet Management.
Securities products and services are offered by E*TRADE Securities
LLC (Member FINRA/SIPC). Bank products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its
subsidiaries and affiliates. ETFC-G
Important Notices
E*TRADE Financial, E*TRADE and the E*TRADE logo are trademarks
or registered trademarks of E*TRADE Financial Corporation.
Forward-Looking Statements
The statements contained in this press release that are forward
looking, including statements relating to E*TRADE’s expectations
regarding the completion, timing and size of the proposed public
offering and the related planned redemption are “forward-looking
statements” within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995, and are
subject to a number of uncertainties and risks. Actual results may
differ materially from those indicated in the forward-looking
statements. The uncertainties and risks include, but are not
limited to, uncertainties and risks related to market conditions,
E*TRADE’s ability to borrow under the senior secured revolving
credit facility and the satisfaction of customary closing
conditions related to the public offering. There can be no
assurance that the public offering will be completed on the
anticipated terms, or at all. Further information about these risks
and uncertainties can be found in the annual, quarterly, and
current reports on Form 10-K, Form 10-Q, and Form 8-K previously
filed by E*TRADE Financial Corporation with the Securities and
Exchange Commission (including information in these reports under
the caption “Risk Factors”) and the risk factors and other
statements included in the prospectus supplement relating to this
offering and the accompanying prospectus (including the documents
incorporated by reference therein). Any forward-looking statement
included in this release speaks only as of the date of this
communication; the Company disclaims any obligation to update any
information.
© 2015 E*TRADE Financial Corporation. All rights reserved.
E*TRADE Media
RelationsThayer Fox,
646-521-4418thayer.fox@etrade.comorE*TRADE
Investor RelationsBrett Goodman,
646-521-4406brett.goodman@etrade.com
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